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Image used for representational purpose only.
| Photo Credit: Kamal Narang
Starting April 1, 2023, merchant transactions over ₹2,000 done through Prepaid Payment Instrument Wallets (PPI Wallets) on UPI will attract an interchange charge of 1.1%. This has been allowed by National Payments Corporation of India (NPCI) which governs UPI.
However, there will be fee to be charged for normal UPI transactions.
The Interchange fee is generally associated with card payments to cover transaction cost.
In a statement, NCPI said as per recent regulatory guidelines, the PPI Wallets have been permitted to be part of interoperable UPI ecosystem.
“The interchange charges introduced are only applicable for the PPI merchant transactions. And there is no charge to customers.”
“It is further clarified that there are no charges for bank account to bank account based UPI payment (normal UPI payments),” NPCI said.
Banks remained tight lipped to comment on this isssue.
Rajsri Rengan, India Head of Development, Banking and Payments, at FIS in a statement said, ”The new interoperability guidelines for prepaid payment instruments announced by the NPCI is a significant step towards building a more inclusive and seamless digital payments ecosystem in India.”
“The interoperability of digital wallets and UPI can be a game-changer for the Indian fintech industry, as it opens up new opportunities for innovation, growth, and competition. With greater interoperability between payment systems, consumers will have more choice and flexibility in how they transact with merchants, leading to increased adoption of digital payments and ultimately driving financial inclusion and economic growth,” the statement said.
“This move will also encourage innovation in the digital payments space, fostering competition and improving the quality of services offered to consumers,” the statement added.
“We believe this is a positive development for the Indian economy and the banking system as a whole, and we look forward to continuing to support the growth and development of digital payments in India,” the statement further said.
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